Walking away from mortgage obligations is being used increasingly as an EXIT STRATEGY … written about and widely reported by the news media.
While increasing numbers of homeowners are paddling just to stay afloat (and in well-over their heads) the ramifications of willfully defaulting on your mortgage can have dire effects on your credit, and will have a ripple effect. Forget about trying to buy or finance another property … or even get a car loan. You may well even have a devil of a time securing a rental property for lease.
If you’re considering walking away from your mortgage, explore the possibility of a loan modification before defaulting on your mortgage. Something to keep in mind is that lenders are not in the business to take on foreclosures, and many of them will be amenable to working with you. They have neither the time nor the resources to deal with foreclosures.
As another, secondary resort, if you are unsucessful negotiating a loan modification, you might want to consider a short sale. (Definition of a SHORT SALE: A short sale is where the expected sales price of a home will fall below what the property owner owes on his/her mortgage… and hence must ask the lender to accept a lesser payoff amount.) By doing a SHORT SALE as opposed to a FORECLOSURE, you will actually be able to re-establish your credit in a much shorter time period (up to half the time it would take on a foreclosure).
If a short sale is something you’d like to explore, please feel free to send me or a member of my team a message here. We have worked sucessfully with short sales, and would be more than happy to talk with you about working with you.
